ABC-C AUTOMATED SYSTEMS IVRS - Telephone • • Can connect with a counselor if needed Available to those without computer access Requires use of SSN and PIN only Can process benefit transactions without counselor assistance Can receive faxed back copies of documents (FEHB enrollment form) Counselors are available 12 hours a day Automated system available 24 hours a day ABC-C toll-free telephone number is 1 -877 -276 -9287 (TDD for the hearing impaired is 1 -877 -276 -9833) Civilian Soldiers Supporting America’s Soldiers 4

FERS FIREFIGHTER (FF) DEFINITIONS • An employee in a position whose duties are primarily to perform work: • Directly connected with the control and extinguishment of fires • Includes an employee who moves directly from a primary firefighter position to a secondary position • Does not include: • An employee whose primary duty is the performance of routine fire prevention inspections Civilian Soldiers Supporting America’s Soldiers 12

RIGOROUS POSITIONS DEFINED • Rigorous duties are defined as: • A position in which the duties are so rigorous that employment opportunities should be limited through the establishment of a maximum entry age and physical qualifications, to young and physically vigorous individuals, whose primary duties are: • To perform work directly connected with controlling and extinguishing fires Civilian Soldiers Supporting America’s Soldiers 13

PRIMARY POSITIONS DEFINED • Paramount in influence or weight; that is, constitute the basic reason for the existence of the position • Occupy a substantial portion of the individual’s working time over a typical work cycle; and • Assigned on a regular and recurring basis Civilian Soldiers Supporting America’s Soldiers 14

SECONDARY POSITIONS DEFINED • Is in the firefighting field; • Is in an organization having a firefighting mission; and • Is either: • Supervisory – a position whose primary duties are as a first-level supervisor of firefighters in rigorous positions; or • Administrative (executive, managerial, technical, semiprofessional or professional) position for which experience in a rigorous firefighting position is a mandatory prerequisite Civilian Soldiers Supporting America’s Soldiers 15

FERS FF • New employees first hired in covered position on/after 01 -01 -1987 • Contribute 1. 3% of salary to FERS • Contribute to Social Security • Can contribute up to IRS limit to TSP, receive agency matching of 5% if you contribute at least 5% of your salary • Automatic 1% contribution regardless of your TSP contribution rate • First 3% of your contributions are matched dollarfor-dollar • Next 2% will be matched at 50 cents on the dollar Civilian Soldiers Supporting America’s Soldiers 20

CSRS INTERIM FF • Employees first hired on/after 01 -01 -1984 & certain rehires • Reduced CSRS contribution rate of 1. 3% • Contribute to Social Security • On 01 -01 -1987, employees with CSRS Interim coverage changed to: • CSRS Offset if you had at least 5 years of civilian service • FERS if you had less than 5 years of civilian service Civilian Soldiers Supporting America’s Soldiers 21

CSRS COMPONENT • If you have civilian service prior to your election of FERS, and • The service was subject to CSRS retirement deductions, or Social Security deductions, but not both, and • The total of these 2 types of service is 5 or more years, then • This period of service is called a CSRS component, and that portion of your retirement annuity, or civilian deposit, etc. will be calculated using CSRS rules (If you have less than 5 years, the service is creditable under FERS rules) Civilian Soldiers Supporting America’s Soldiers 22

FERS is a 3 -tiered retirement system FERS annuity is the smallest component TSP WILL make up the largest portion of your total retirement FERS Annuity Social Security Thrift Savings Plan Civilian Soldiers Supporting America’s Soldiers 23

RETIREMENT SERVICE COMPUTATION DATE (RSCD) • Used to determine retirement eligibility and to calculate retirement annuity • May not be the same as your Leave SCD (SCD that appears on your SF 50 & LES) • Not all service that is creditable for leave is creditable for retirement Civilian Soldiers Supporting America’s Soldiers 25

RETIREMENT SERVICE COMPUTATION DATE (RSCD) • Examples of service that is creditable for leave but not for retirement: • Non-Appropriated Fund (NAF) service on a temporary appointment • For retired military, campaign or combat service if retired military pay is not being waived • Military service when the military deposit has not been paid • Service on a temporary appointment performed on or after 01 -01 -1989 • Refunded FERS service Civilian Soldiers Supporting America’s Soldiers 26

WHAT IS DEPOSIT SERVICE? Any period of potentially creditable service during which retirement deductions are not withheld: • Generally, non-career time such as temporary or indefinite service • Also known as non-deduction service Civilian Soldiers Supporting America’s Soldiers 27

DEPOSIT SERVICE However, it can also be service that was not considered Federal employment at the time it was performed, but a subsequent change in law now allows credit for retirement annuity computation purposes (VISTA & Peace Corps). Amount of Deposit: • 1. 3% of earnings + Interest (3% of stipend for VISTA & Peace Corps) • Interest will vary depending upon the date service was performed • FERS with CSRS component, CSRS rules apply • FERS with no CSRS component, FERS rules apply Civilian Soldiers Supporting America’s Soldiers 28

DEPOSIT SERVICE Non-Deduction Service prior to 01 -01 -1989 Deposit Made Credit for eligibility (RSCD) and Annuity Computation Deposit Not Made No credit for eligibility (RSCD) and Annuity Computation Civilian Soldiers Supporting America’s Soldiers 29

DEPOSIT SERVICE Non-Deduction Service on or after 01 -01 -1989 DEPOSIT NOT ALLOWED No credit for Eligibility or Annuity Computation Civilian Soldiers Supporting America’s Soldiers 30

HOW TO PAY A CIVILIAN DEPOSIT OR REDEPOSIT • Complete front page of SF 3108, Application to Make Service Credit Payment (FERS) and send to the ABC-C. • ABC-C will calculate an estimated deposit/redeposit amount and mail to OPM. • OPM will notify you of final deposit/redeposit amount and payment procedures. • OPM will send you a receipt and new balance each time payment is made. • Ensure “Payment in Full” notice is filed in OPF. PAID IN FULL Civilian Soldiers Supporting America’s Soldiers 32

MILITARY DEPOSIT Civilian Soldiers Supporting America’s Soldiers 33

PRE 01 -01 -1957 MILITARY SERVICE No deposit required for creditable military service performed prior to 01 -01 -1957 Civilian Soldiers Supporting America’s Soldiers 34

CREDIT FOR POST-56 MILITARY SERVICE IN RECEIPT OF MILITARY RETIRED PAY Based on Non – Combat Disability or Length of Service Based on Combat Disability or Chapter 1223, Title 10 (Reserves) No Credit unless Military Retired Pay is waived & deposit is paid Must Pay to receive credit for Eligibility (RSCD) & Annuity Computation Civilian Soldiers Supporting America’s Soldiers 35

HOW TO PAY A MILITARY DEPOSIT • Complete Form RI 20 -97, Estimated Earnings During Military Service, and send to the appropriate branch of service (addresses are on the ABC-C website). Include copies of all of your DD 214 s. • Upon receipt of estimated earnings, include your DD 214, SF 3108 page 1 and SF 3108 A and forward to the ABC-C. The ABC-C will calculate an estimate of the deposit owed and forward to DFAS. • DFAS will finalize the amount owed and advise you of payment options. Payments are made directly to DFAS-Cleveland. • Ensure “Payment In Full” notice is filed in OPF. Civilian Soldiers Supporting America’s Soldiers 37

TRANSFER REQUIREMENTS FERS FF • While covered under the special provision, you move directly (that is, without a break in service exceeding 3 days) from a primary position; and • You have completed 3 years of service in a rigorous position, including any such service in which no FERS deductions were withheld; and • If applicable, you have been continuously employed in a secondary position or positions since moving from a a primary position without a break in service exceeding 3 days. Civilian Soldiers Supporting America’s Soldiers 39

RETIREMENT ELIGIBILITY FERS FF Minimum: Age 50 with 20 years creditable special service, or any age with 25 years creditable special service Mandatory: Age 57 with 20 years creditable special service; or when 20 years creditable special service is reached after age 57 Civilian Soldiers Supporting America’s Soldiers 40

FERS ANNUITY SUPPLEMENT • An estimated amount of Social Security benefits earned during FERS service • Benefit paid until age 62 to certain FERS employees who retire before age 62 and are entitled to an immediate annuity • Eligibility: • Has at least 1 calendar year of FERS service AND • Retires with an immediate annuity • At or after MRA with 30 years • At age 60 with 20 years of service • At or after MRA under Early/DSR retirement provisions • Under Special Provisions (i. e. , FF, LEO, etc. ) • Individuals NOT eligible for annuity supplement: • Disability Retiree • MRA +10 provision • Deferred Annuity • Retiring at age 62 or older • CSRS Employees • Duration of annuity supplement: • Payable through the earlier of the following dates: • Last day of the month you become age 62 OR; • Last day of the month before the first month you are entitled to Social Security benefits. Civilian Soldiers Supporting America’s Soldiers 42

FERS ANNUITY SUPPLEMENT Supplement is tested for earnings above the Social Security exempt amount ($14, 160 for 2009) • Earnings include wages and self-employment income. • Income from severance pay (including VSIP), pensions, savings and investments are NOT subject to the earnings test. • Annuity supplement will be offset by $1 for every $2 over this amount that is earned in 2009. Civilian Soldiers Supporting America’s Soldiers 43

ELIGIBILITY COMPUTATION AGE TOTAL SERVICE Date of Retirement - Date of Birth - Retirement SCD Age at Retirement Length of Service Civilian Soldiers Supporting America’s Soldiers 44

UNUSED SICK LEAVE • For individuals covered by FERS: No credit for any sick leave • For individuals who have transferred to FERS with a CSRS component, the amount of sick leave credited is the lesser of: • Sick leave balance on date of transfer to FERS OR • Sick leave balance on date of retirement Civilian Soldiers Supporting America’s Soldiers 45

HIGH - 3 AVERAGE SALARY • Weighted average of highest 3 years of basic pay (including locality pay/local market supplement) • Must be 3 consecutive years • Is usually the last 3 years • Is the highest salary, not the highest grade • Normally, the beginning date of the 3 year period is determined by subtracting 3 years from the date of retirement Civilian Soldiers Supporting America’s Soldiers 47

HIGH-3 AVERAGE SALARY COMPUTATION (FF) – EMBEDDED TOUR • To calculate the basic pay for sustained 40 hour week (embedded tour): • The first 80 hours are computed based on a 2087 -hour work year • Additional hours are calculated using a 2756 -hour work year Civilian Soldiers Supporting America’s Soldiers 50

HIGH-3 AVERAGE SALARY COMPUTATION (FF) – EMBEDDED TOUR • Divide basic pay + locality by 2087 to compute hourly rate. Multiply this hourly rate by 80 to find the regular pay period. • Divide basic pay + locality by 2756 to compute the stand-by rate. Multiply this stand-by rate by the number of hours worked in excess of 80 hours. • Add the regular pay to the stand-by pay and multiply by 26 to compute the pay for retirement and FEGLI. Civilian Soldiers Supporting America’s Soldiers 51

SURVIVOR BENEFIT PAYMENTS • The survivor benefit is payable for life unless the survivor remarries before age 55. • Benefits will be restored if the remarriage terminates in death, annulment or divorce. Civilian Soldiers Supporting America’s Soldiers 57

DISABILITY RETIREMENT • Disability – Unable to render useful & efficient service because of disease or injury • Must be in a position covered by FERS • Minimum of 18 months creditable civilian service • Disability annuity IS subject to Federal tax Civilian Soldiers Supporting America’s Soldiers 58

DISABILITY RETIREMENT ANNUITY AMOUNT IF UNDER AGE 62 AT SEPARATION: FIRST 12 MONTHS AFTER 12 MONTHS 60% x high 3 average salary 40% x high 3 average salary minus 100% of 60% of Social Security Benefits Disability annuity is recomputed at age 62 to an amount that represents the annuity you would have received if you had continued working until the day before your 62 nd birthday and then retired under non-disability provisions. Civilian Soldiers Supporting America’s Soldiers 60

DISABILITY ANNUITY AMOUNT If 62 or older or eligible for Optional Retirement, an employee receives an "earned annuity" based on the general FERS computation formula if you: • Are 62 years old or older; OR • Meet the age and service requirements for regular, unreduced immediate retirement (MRA with 30 years, age 60 with 20 years, or age 62 with 5 years) Civilian Soldiers Supporting America’s Soldiers 61

DEATH-IN-SERVICE • If you die while still an active employee, your survivor MAY be entitled to death benefits • In the event of your death, your survivor needs to contact your servicing Human Resources (HR) representative • HR will contact ABC-C • An ABC-C counselor will contact the survivor within 24 hours Civilian Soldiers Supporting America’s Soldiers 63

DEATH-IN-SERVICE Spousal Benefits: Monthly annuity (survivor benefits) payable if married to employee at least 9 months EXCEPTIONS to the 9 months of marriage requirement: • Spouse is the parent of a child of the marriage, or • Death was accidental Civilian Soldiers Supporting America’s Soldiers 64

DEATH-IN-SERVICE Children’s Benefit(s) are payable if: • The child is unmarried AND under 18, or • Under age 22 if full-time student, or • Any age and disabled before 18 Civilian Soldiers Supporting America’s Soldiers 65

DEATH-IN-SERVICE • Up to 3 children if a parent is living • 2009 rate is $469 per month per child • More than 3 children, $1, 409 divided by # of children • Up to 3 children if no living parent • 2009 rate is $563 per month per child • More than 3 children, $1, 691 divided by # of children • Amount reduced by Social Security benefits Civilian Soldiers Supporting America’s Soldiers 66

DEATH CLAIM PROCESSING TIME Number of Days 1 JANUARY – 31 DECEMBER 2008 2 102 96 90 67 Goal: Complete NLT 5 working days after claim forms are received. Civilian Soldiers Supporting America’s Soldiers 67

COST OF LIVING ADJUSTMENTS (COLA) • Annual rate based on rise in Consumer Price Index (CPI) Increase in CPI Amount of COLA Up to 2% 2% 3% or more • Full CPI 2% - 3% • • CPI – 1% • • Effective 1 Dec each year Payable in Jan (1/12 of COLA for each month) Must be 62 or older to receive – unless you retire under special provisions for firefighters Disability annuitants and survivors receive COLA at any age COLA for 2009 is 4. 8% Civilian Soldiers Supporting America’s Soldiers 68

WINDFALL ELIMINATION PROVISION (WEP) • If you didn't pay Social Security taxes on your government earnings and you are eligible for Social Security benefits, the formula used to figure your benefit amount may be modified, giving you a lower Social Security benefit. • WEP affects Social Security benefits when any part of your Federal service after 1956 is covered under the Civil Service Retirement System (CSRS). However, Federal service where Social Security taxes are withheld (Federal Employees’ Retirement System or CSRS Offset) will not reduce your Social Security benefit amounts. Civilian Soldiers Supporting America’s Soldiers 69

WINDFALL ELIMINATION PROVISION (WEP) WEP does not apply to survivors benefits. It also does not apply if: • You are a Federal worker first hired after December 31, 1983; • You were employed on December 31, 1983, by a nonprofit organization that did not withhold Social Security taxes from your pay at first, but then began withholding Social Security taxes from your pay; • Your only pension is based on railroad employment; • The only work you did where you did not pay Social Security taxes was before 1957; or • You have 30 or more years of substantial earnings under Social Security. 70 Civilian Soldiers Supporting America’s Soldiers

GOVERNMENT PENSION OFFSET (GPO) • If you receive a pension from a Federal, state or local government based on work where you did not pay Social Security taxes, your Social Security spouse’s or widower’s benefits may be reduced. You are exempt from the GPO if you were contributing to Social Security for your last 5 years of federal employment. • Your Social Security benefits will be reduced by 2/3 s of your government pension. • Monthly civil service pension - $1, 200 • 2/3 s offset to Social Security - $ 800* • Spouse, widow or widower benefit - $1, 000 • Final amount due - $ 200 ($1, 000 – $800* = $200) http: //www. socialsecurity. gov/gpo-wep/ Civilian Soldiers Supporting America’s Soldiers 71

NON-APPROPRIATED FUND (NAF) RETIREMENT PROCESSING IMPORTANT!! If you are retiring and immediately being hired by NAF, or transferring to other Federal employment, you must notify the ABC-C before your retirement is processed to prevent erroneous payout of your lump sum annual leave. Civilian Soldiers Supporting America’s Soldiers 73

FEHB & RETIREMENT CONTINUATION INTO RETIREMENT • Retire on an immediate annuity • Be insured on the date of retirement • Covered for the 5 years of service prior to retirement or since your FIRST opportunity to enroll (special rules for VERA and DSR) • Coverage as a family member under FEHB or CHAMPUS/TRICARE counts towards 5 year requirement, however, (employee must be enrolled in FEHB prior to retirement) Civilian Soldiers Supporting America’s Soldiers 75

FEHB & RETIREMENT • Cost of FEHB is the same for retirees and active employees except that premiums are paid on a monthly basis vs. bi-weekly • Same Open Season and qualifying life event opportunities as active employees • Same FEHB plans available to retirees as active employees • Once you cancel FEHB coverage in retirement, you can never re-enroll • At age 65, you must enroll in Medicare and it becomes your primary and your FEHB plan becomes your secondary provider Civilian Soldiers Supporting America’s Soldiers 76

FEHB & RETIREMENT • Retirees can suspend FEHB for TRICARE or Medicare (if enrolled in Medicare + Choice health plan) and return to FEHB coverage during Open Season or immediately upon involuntarily losing non-FEHB coverage. • Retirees do NOT participate in Premium Conversion. • Your spouse is eligible to continue FEHB coverage after your death only if you have Self and Family coverage and you elect to provide a survivor benefit at retirement. 77 Civilian Soldiers Supporting America’s Soldiers

FEGLI & RETIREMENT CONTINUATION INTO RETIREMENT: • Retire on an immediate annuity • Insured on date of retirement • Enrolled in each Option and Multiple for the 5 years of service prior to retirement OR since your FIRST opportunity to enroll • Election Form: SF 2818 - Continuation of Life Insurance Coverage – form requires 4 signatures Civilian Soldiers Supporting America’s Soldiers 80

TSP FUNDS • International Stock Index Investment (I) Fund • International stocks of 21 developed countries • Invested in stock index fund that tracks the Morgan Stanley Capital International EAFE (Europe, Australasia, Far East) index • Potential to earn high investment returns over the long term • Moderate to high risk • 10 -year annual return: 8. 53% • Lifecycle (L) Fund • Each L Fund is invested in the individual TSP funds (G, F, C, S, I), using investment allocations that are tailored to different time horizons • Objective is to provide the highest possible rate of return for the amount of risk taken • Subject to the risks of the individual funds • Expected returns will be approximately equal to weighted average of the G, F, C, S, I Funds’ returns Civilian Soldiers Supporting America’s Soldiers 89

LIFECYCLE FUNDS FUND TIME HORIZON GROWTH RISK L Income Today and the near future Low L 2010 2008 through 2014 Moderate L 2020 2015 through 2024 Moderate to High L 2030 2025 through 2034 High L 2040 2035 or later High Very High Civilian Soldiers Supporting America’s Soldiers 90

TSP & RETIREMENT OPTIONS • • Automatic cashout (accounts less than $200) Leave money in the TSP Age-based withdrawal Full Withdrawal • Single payment • Monthly payments • Life annuity • Mixed Withdrawal • Must begin to receive TSP funds by April 1 of the year following the year you are 70 ½ HOW TO APPLY: TSP-70 FORM - Withdrawal Request Civilian Soldiers Supporting America’s Soldiers 93

TSP CATCH-UP CONTRIBUTIONS • Open to TSP participants age 50 or older • Not eligible for agency automatic 1% matching contribution • Limited to $5, 500 for year 2009 • Must be contributing IRS yearly maximum, $16, 500 for 2009 • Must make new election each year Elections made via EBIS at https: //www. abc. army. mil or IVRS at 1 -877 -276 -9287 Civilian Soldiers Supporting America’s Soldiers 94